1)
Current selling price = 382500 / 5100 = 75
Revised selling price = 75 * (1 + 12%) = 84
Revised sales = 84 * 5100 = 428400
Net Income = Revised sales - Variable cost - Fixed cost
= 428400 - 247000 - 96000
= 85400
2)
Current sales = 382500
Variable cost = 57% * 382500 = 218025
Net Income = Sales - Variable cost - Fixed cost
= 382500 - 218025 - 96000
= 68475
The increase in selling price will lead to a higher net income
Cullumber Company reports the following operating results for the month of August: sales $382,500 (units 5,100),...
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